Selection models in accounting research

Lennox, CS; Francis, JR; Wang, Z

Selection models in accounting research

Lennox, CS Francis, JR Wang, Z

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Publication Type:: Journal Article
Citation:: Accounting Review, 2012, 87 (2), pp. 589 - 616
Issue Date:: 2012-03-01

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Field	Value	Language
dc.contributor.author	Lennox, CS	en_US
dc.contributor.author	Francis, JR	en_US
dc.contributor.author	Wang, Z	en_US
dc.date.issued	2012-03-01	en_US
dc.identifier.citation	Accounting Review, 2012, 87 (2), pp. 589 - 616	en_US
dc.identifier.issn	0001-4826	en_US
dc.identifier.uri	http://hdl.handle.net/10453/29811
dc.description.abstract	This study explains the challenges associated with the Heckman (1979) procedure to control for selection bias, assesses the quality of its application in accounting research, and offers guidance for better implementation of selection models. A survey of 75 recent accounting articles in leading journals reveals that many researchers implement the technique in a mechanical way with relatively little appreciation of important econometric issues and problems surrounding its use. Using empirical examples motivated by prior research, we illustrate that selection models are fragile and can yield quite literally any possible outcome in response to fairly minor changes in model specification. We conclude with guidance on how researchers can better implement selection models that will provide more convincing evidence on potential selection bias, including the need to justify model specifications and careful sensitivity analyses with respect to robustness and multicollinearity.	en_US
dc.relation.ispartof	Accounting Review	en_US
dc.relation.isbasedon	10.2308/accr-10195	en_US
dc.subject.classification	Accounting	en_US
dc.title	Selection models in accounting research	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	87	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
utslib.copyright.status	closed_access
pubs.issue	2	en_US
pubs.publication-status	Published	en_US
pubs.volume	87	en_US

Abstract:

This study explains the challenges associated with the Heckman (1979) procedure to control for selection bias, assesses the quality of its application in accounting research, and offers guidance for better implementation of selection models. A survey of 75 recent accounting articles in leading journals reveals that many researchers implement the technique in a mechanical way with relatively little appreciation of important econometric issues and problems surrounding its use. Using empirical examples motivated by prior research, we illustrate that selection models are fragile and can yield quite literally any possible outcome in response to fairly minor changes in model specification. We conclude with guidance on how researchers can better implement selection models that will provide more convincing evidence on potential selection bias, including the need to justify model specifications and careful sensitivity analyses with respect to robustness and multicollinearity.

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http://hdl.handle.net/10453/29811